STATE OF SATYAM

2009-01-07T07:48:00.000-08:00

Raju has set the bar for Fraudsters in India. This is one of the biggest in the world and the coolest. He wakes up one fine morning and writes a crystal-clear confession to the board and exchanges and agrees to accept the consequences.

The man is Shakespearean in his Mea Culpa. Those "Best Entrepreneur" or "Best Coporate Governance" awards by accounting firms (bunch of asswipes) and banks to these clowns are nothing more than marketing tools and money minting gimmicks.

Enough of lauding the Raju Garu, we will turn to the actual fate/state of Satyam as a firm. Is it DEAD or ALIVE ? Lets examine some quick facts (wonkish) :

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From the letter "
For the September quarter (Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore (24 per cent of revenues) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of reve nues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone"

Satyam last quarter profit is only 61 crores ? That sounds too low. For a sales of 2112 crores , why are they earning only 61 crore profit. Is this an IT company or a street side fake CD seller ?

If last quarter profit is only 61 crore then how can the new CEO say " Over the past twenty-one years, with your passion and commitment we have built significant customer assets, formidable service offerings, excellent delivery processes and scalable support systems."

Ram, the operating margins are only 3%. Over the past twenty years whatever was going on at satyam is going to come out soon. WITH AN OPM OF 3% NOBODY WILL APPROACH SATYAM FOR A BUYOUT.

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From the Raju letter :

The balance sheet carries of September 30, 2008 a. Inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books) b. An accrued interest of Rs 376 crore which is non-existent c. An understated liability of Rs 1,230 crore

Translation : You all thought we have 5361 crores of cash but 5040 doesnt exist. I played the APRIL FOOL on you. So do you think we have 321 crores atleast (ie 5361 minus 5040) ? Geez no ! We have fooled you on 376 crore accrued interest and 1230 liability. That puts us in a NEGATIVE BOOK VALUE.

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The substantial additional inflation posititions that SAY would have had to adjust on their balance sheet would have caused total stockholders’ equity to be negative."

SATYAM IS BANKRUPT, I rest my case !!